(Advanced Analysis) in a Private Closed Economy, (A) the Marginal

question 85

Multiple Choice

(Advanced analysis) In a private closed economy, (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion, and (c) the level of investment is $40 billion. What is the
Equilibrium level of income?

• A) $280 billion
• B) $320 billion
• C) $262 billion
• D) $198 billion